$1.2 Trillion Later, and Air Traffic Control is Still Using Floppy Disks
James Hickman

In 1988, a Professor of Anthropology at the University of New Mexico named Joseph Tainter published a book called The Collapse of Complex Societies.

Now, “collapse” is a strong word that conjures images of apocalyptic scenarios… Mad Max or Hunger Games drama. But that’s not what Tainter intended.

He uses the term ‘collapse’ in its academic, anthropological meaning, i.e. a breakdown of strength and order in  society. In fact Tainter’s entire career has been devoted to investigating how large, sophisticated civilizations throughout history ultimately “collapsed”.

I first read Tainter’s book more than 15 years ago. And, even though it is a work of anthropology, it is, in my opinion, one of the best books on economic history ever produced.

From the Roman Empire to the Mayan people, Tainter explores how civilizations are born, grow, peak, and decay… and how, more often than not, the decay phase is a direct result of failed government or leadership.

In the early phases of their life cycles when a society is beginning its rise, there aren’t yet enough resources for governments to squander… therefore leaders tend to make very smart, shrewd decisions.

Easy example: the US government purchased over 2 million square kilometers from Napoleon in the year 1803 at a total cost of roughly $15 million. Using gold as a proxy for inflation, that works out to be $2.6 billion in today’s money.

Talk about a bargain. Just the 5 biggest cities which exist today because of that land purchase— Minneapolis, Denver, St. Louis, Kansas City, Oklahoma City— contributed more than $1 trillion in economic activity to the US economy last year, i.e. roughly $170 billion in federal tax revenue.

That’s a hell of a return.

Another example: back in the 1950s, when America had just become the world’s dominant superpower, the Eisenhower administration built the federal highway system that cost about $250 billion in today’s money.

That $250 billion infrastructure investment easily repaid itself many times over in terms of tax revenue and economic growth, let alone quality of life improvements for Americans.

Yet, as Tainter argues, when a society peaks, it begins to lose its ability to make sensible, long-term decisions or to solve complex problems. They set bad priorities, they make bad investments… and they often fail to tackle problems at all.

In contrast to the original $250 billion highway project in the 1950s, the US government allocated $1.2 trillion in 2021 to invest in infrastructure. And how did that work out?

Well, we know former Transportation Secretary Pete Buttigieg spent $7.5 billion of this money to build just seven electric vehicle chargers.

And precisely $0 of that money was used to upgrade America’s air traffic control systems, which have been under intense scrutiny lately for being outdated, overwhelmed, and insufficient.

Talk about something that puts Americans’ lives at risk.

You might be interested to know that these air traffic control systems— which are responsible for making sure that airplanes flying at 500 miles per hour don’t collide with one another— are still relying on floppy disks.

If you’re under the age of 30, you probably don’t even know what a floppy disk is. If you’re under the age of 40, you probably have never seen one.

Floppy disks were removable storage technology that were prevalent in home computers in the 1980s… sort of like a USB memory stick, only MUCH slower and with a fraction of the storage capacity.

A typical 3.5” floppy disk could only hold 1.44 megabytes of data, i.e. not even enough to store even a single photo from your mobile phone’s camera.

Yet this is the technology that America’s air traffic controllers still have to use… because the Transportation Department thought it was a better idea to spend billions of dollars on a handful of electric vehicle charging stations.

The new Transportation Secretary, Sean Duffy, recently called for replacing floppy disks, Windows 95, and paper flight strips; he says this is “the most important infrastructure project we’ve had in this country for decades.”

Somehow, no one thought to use some of the $1.2 trillion authorized in 2021 on the most important infrastructure project in decades.

To be fair, Duffy’s predecessor Pete Buttigieg had other priorities— like ensuring “racial equity” in highway construction and forcing vehicle manufacturers to use female crash test dummies.

But even without all the woke distractions, Secretary Duffy expects the transition to take four years and cost tens of billions of dollars. And many believe this estimate is wildly optimistic…

This is what government problem-solving looks like in the United States in 2025: as Tainter argued in his book, it is an obvious inability to solve problems.

Let’s be intellectually honest and acknowledge the many advantages that the US still has. The private sector is one of the most productive, diversified, and technologically advanced in the world.

The US is also rich in vital resources, from fresh water and farmland to energy and essential minerals.

And, as the world found out over the past several days, US military capabilities and weapons systems are still tip-top. I explained this in yesterday’s podcast about why World War III is less likely because of the Israel/Iran conflict.

But none of those advantages will matter if the US government fails to solve obvious problems.

If they can’t even manage to upgrade the air traffic control system from floppy disks, how can we expect them to save Social Security or cut the deficit?

Simon Black, as James Hickman is more commonly known, is the Founder of Sovereign Man. 

He is an international investor, entrepreneur, and a free man. His daily e-letter, Sovereign Letters, draws on his life, business and travel experiences to help readers gain more freedom, more opportunity, and more prosperity.

Hickman is a lifelong entrepreneur and investor that’s traveled to more than 120 countries on all seven continents. In addition, he’s started, invested in, or acquired businesses all over the world. 

He is a graduate of the United States Military Academy at West Point and served in the US Army as an intelligence officer during Operation Enduring Freedom and Operation Iraqi Freedom.

Hickman founded a South America-based agriculture company that has become one of the leading producers in its industry. A few years ago, he acquired a prominent retail brand in Australia, purchasing the business from the former 1980s era rock star who founded it. 

His other business ventures have included starting a boutique, private investment bank that boasts some of the highest levels of liquidity and solvency in the world, and investing in companies from Colombia to Uzbekistan. He also serves on numerous Boards of Directors, and previously served as Chairman of company listed on a major stock exchange. 

Writing under the pen name Simon Black, he has also written extensively on business incorporation and tax residency establishment in Puerto Rico, and is a proponent of investing in gold and silver as a hedge against inflation.

He is a also a prolific writer on topics ranging from second residency and citizenship, Golden Visas and portfolio diversification, to estate and retirement planning, asset protection, tax optimization and US Opportunity Zones.

 

www.schiffsovereign.com